Teens Talk More About Economics, but No Better Informed

Since the financial crisis and recession, American teenagers have become more aware of economics but not more informed about the subject.

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The nation’s “Report Card in Economics,” released Wednesday, found no improvement in high-school seniors’ economics knowledge from six years ago, on the eve of the crisis. The U.S. Department of Education project surveyed and tested nearly 11,000 12th-graders in 480 American public and private schools.

“More students say they’re talking about economics with their friends and family,” than before the downturn, said Jack Buckley, commissioner of the National Center for Education Statistics. “Economics is more a part of their lives than it was in 2006.”

While more students reported receiving some kind of economics instruction — in classes such as history or civics or government — than six years ago, that knowledge isn’t yet reflected in test results. Researchers found almost no difference between the average score in 2012 — 152 out of a possible 300 points — and the 150 average score recorded in 2006, when the first such assessment was made.

That near-unchanged score “may reflect that the students may be talking about economics more but not learning the theoretical concepts,” Mr. Buckley said.

Edward Alvarez, assistant principal at Thomas A. Edison Career & Technical Education High School in Jamaica, N.Y., has taught economics and finance for more than seven years. “Unfortunately, high-school students nationwide are still well short of where they should be,” he said in a conference call about the Report Card.

Students in the project were asked to answer written and multiple-choice questions about concepts in personal finance, business and government policy.

Researchers also found few differences in the distribution among the three levels of students’ economics knowledge: basic, proficient or advanced. Basic knowledge means a student can identify and recognize concepts such as gross domestic product; proficient entails a more comprehensive set of concepts, including opportunity costs and interest rates. Advanced translates into an understanding of fiscal and monetary policy as well as exchange rates. In both the 2006 and 2012 assessments, only 3% of students were advanced. The other two levels inched up: 39% of students were at the basic level in 2012, from 38% in 2006; the percentage of proficient students rose to 40% in 2012 from 39% in 2006.

Officials at organizations that helped prepare the Report Card emphasized the need to raise the scores.

“This isn’t great news… I’m not jumping up and down on this one,” said Nan J. Morrison, president and chief executive of the Council for Economic Education, which advances economic and financial literacy.

However, she cited “glimmers of hope” in the results, such as gains by Hispanics as well as advancement from the below-basic level to basic level by students whose parents had less than a high-school education.

The Report Card’s findings mesh with other recent research exposing a lack of financial and economic literacy among young people. Scholars at George Washington Universitythis week published a paper concluding that many young adults who tap high-cost borrowing options, such as payday loans and pawnshops, are unfamiliar with basic financial concepts. The research comes as federal regulators are said to be readying a crackdown on payday lending.

Annamaria Lusardi, of the George Washington University School of Business, who wrote “Financial Literacy and High-Cost Borrowing in the United States,” with her colleague Carlo de Bassa Scheresberg, said relying on payday loans isn’t a “fringe” practice. “Young people are getting used to alternate financial services” and those who use them often have a lower level of financial literacy, she said.

The national report card’s findings on high school seniors was unsurprising, said Dr. Lusardi, who emphasized that reading media reports on the economy was no substitute for classroom learning. News articles and television programs might spark interest in the subject, she said, but financial and economic literacy “is really learned at school.”

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